R&R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs of three types of tax returns follow. R&R provides services in the ratio of 4:3:3 (easy, moderate, business). Fixed costs total $19,575 for the tax season.
Type of Return Fee Charged Variable Cost per Return
Easy (form 1040EZ) $ 44 $ 27
Moderate (form 1040) 119 72
Business 269 97
(1) Determine the selling price per composite unit
Ratio Fee Charged Total per composite unit
Easy (form 1040EZ) 3
Moderate (form 1040)
Business
(2) Determine the variable costs per composite unit
Ratio Variable cost per return Total per composite unit
Easy (form 1040EZ)
Moderate (form 1040)
Business
Contribution margin per composite unit
Contribution margin
Answers: 2
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